Settlement with banks reached in ABC Learning Centres legal action; Country Road earnings up 66% following Witchery and Mimco acquisitions: Midday Roundup

Relief is on the way for childcare workers left out of pocket by the collapse of ABC Learning Centres, with litigation funder Bentham IMF announcing today a settlement has been reached by the liquidators of ABC Learning Centres and the big four banks.

The settlement, which has been reached in the Federal Court, relates to a charge taken by the banks in the lead up to the collapse of the childcare provider in 2008.

Bentham IMF said the floating charge created by banks, including Commonwealth Bank, National Australia Bank, Westpac and ANZ Bank, meant they could effectively “jump the creditors’ queue after the collapse”, ahead of some unpaid employee entitlements.

Bentham IMF said this is the first time a settlement has been reached between a liquidator and one or more major banks in an insolvency matter.

“This was a David versus Goliath battle, with small creditors and childcare workers on the one side facing off against the country’s biggest banks on the other,” said Bentham IMF executive director John Walker.

Country Road earnings up 66% following Witchery and Mimco acquisitions

Country Road appears to be one retailer weathering the storm against sluggish consumer confidence, with the fashion chain announcing it expects its 2013-14 earnings before interest and tax to be up as much as 66%.

Fairfax reports Country Road is expecting to record earnings of between $92.9 million and $100.9 million for the year ending June, which would put it between 52.8% and 66% higher than its 2013 results.

Earnings before interest, tax, depreciation and amortisation are expected to come in at between $115.7 million and $123.7 million, up by between 41 and 50.8%

The boon is in large part due to the retailer’s acquisitions of Witchery and Mimco in 2012, which are starting to deliver strong results.

“We are pleased to have delivered continued strong growth in sales and profit for the full financial year despite some challenging market headwinds from increased competition, unseasonably warm weather and contractionary fiscal policy in the second half of the financial year,” said Country Road chief executive Iain Nairn.

The fashion chain is currently majority owned by Woolworths South Africa, which has offered to buy out shareholder Solomon Lew.

Shares down on open

Aussie shares are tracking slightly lower this morning, as the local market waits for the US to gear up again after the July 4 holiday.

The S&P/ASX200 benchmark was down 2 points at 12.19pm AEST. Last week, the Dow Jones closed 92.02 points higher, up 0.54% to 17068.3 points.